Venture capital firm New Atlantic Ventures listens to a pitch from CourseMaven in 2013. (Dayna Smith/For The Washington Post)

If Washington is merely a government town, no one told the venture capital community.

Investors have funneled sizeable sums of cash over the past several months into a string of local companies that hail from a broad swath of industries, including education technology, retail software, digital media and restaurants.

Individually, these small but growing companies don’t pack much economic punch. But taken together, they are a positive sign that the regional economy is starting to diversify beyond the federal government and its many contractors.

“It’s a little unfair to paint the region as overly focused on contracting and defense,” said John Backus, managing partner at Reston-based investment firm New Atlantic Ventures. “That’s a brush we get painted with mostly from people outside the region.”

Still, there’s no doubt that the federal government has long been the buttress of Washington’s economy, providing thousands of jobs and billions of dollars in contracts. As the government begins to retrench, however, economists believe the local job market could see an influx of talented technologists. They have to work somewhere, and young companies offer one possibility.

Sweetgreen co-founders Nicolas Jammet, Nathaniel Ru and Jonathan Neman at the restaurant’s headquarters in 2013. (Jeffrey MacMillan)
High-tech workforce

If a new growth engine is to start revving, a recent spate of deals might suggest where the spark will originate.

Lanham-based Optoro, which develops software for retailers to process and sell the merchandise customers return, raised $50 million in December from investors that include Silicon Valley’s Kleiner Perkins Caufield & Byers.

That same week, District-based TrackMaven announced a $14 million haul led by Chevy Chase-based New Enterprise Associates. Founded two years ago, the company’s software allows major consumer companies to monitor their online marketing efforts.

“Those clearly are building off of the technology-intensive workforce that we have, which one could say was attracted here because of federal contracting opportunities and are now available because those federal contracting opportunities are shrinking,” said Stephen Fuller, director of the Center for Regional Analysis.

The growth of the federal government in recent decades has been a major boon for the local economy. Defense and civilian agencies provide thousands of jobs throughout Maryland, Virginia and the District, not to mention the myriad institutions whose budgets are supported through federal grants or appropriations.

From 1983 to 2010, the total value of federal contracts performed in the region increased from $7 billion to $83.1 billion, according to George Mason University’s Center for Regional Analysis. That has propelled some area contractors into the region’s largest publicly traded companies, among them Lockheed Martin, General Dynamics and Northrop Grumman.

But the Center for Regional Analysis also found that federal contracting activity decreased by $13.5 billion, or 16 percent, between 2010 and 2013. Just as greater Washington disproportionately benefits from the government’s growth, it disproportionately suffers during periods of decline.

Jim Bankoff, chairman and chief executive of Vox Media. (Ricky Carioti/The Washington Post)
The next hot sectors

Many in the region’s entrepreneurial community say the government’s weighty presence will influence the region’s next big industries. Those that are heavily regulated by the federal government, for example, are deepening their roots in Washington.

Investors and entrepreneurs regularly name health care, education and green technology as hot sectors in Washington for that very reason.

Privia Health offers a banner example. In late September, the Arlington-based health-care company raised $400 million to expand the network of physicians who join its medical group. The company uses software to connect patients with doctors when they are not in the office.

The company now plans to add doctors in Texas, Florida, Georgia and New York. The driver of that growth? The Affordable Care Act, which changes how doctors provide care and get paid for it, chief executive Jeff Butler said.

Reston-based Echo360, which provides hundreds of colleges with software to enhance student performance, added $18 million to its coffers in November. The company has raised $67 million to date, and counts 115 employees, including 70 in Northern Virginia.

That same month, Arlington-based cybersecurity firm Endgame collected $30 million. The company is now pushing into the private sector after getting its start as, you guessed it, a government contractor. It’s a path other companies are following as well.

“It does show that the Washington economy is adaptable. What we need to do is build more business-to-business activity instead of business-to-government,” Fuller said.

For Backus, the investor at New Atlantic Ventures, one of the most important characteristics of all these deals is their size. Investors pour larger sums of money into later-stage companies, and those are the ventures most likely to hire employees and ultimately go public or become an acquisition target.

“There’s a ton of stuff going on at the seed level. Most of those companies never break through and make it to the big time,” Backus said. “These are all later-stage rounds in companies that already got some traction and scale.”

“The later stage means these are real businesses,” he added.

But even real businesses sometimes fail to reach their full potential. The barriers that stand between young companies, including those with well-heeled investors, and the kind of sustained success needed to make an economic impact are numerous and often unpredictable. After all, it wasn’t that long ago when the online deals site LivingSocial appeared ready to make the leap. The D.C. company has since retrenched.

Center for media and hospitality

Vox Media grabbed headlines in early December when the online media company raised $46.5 million from investors. The deal valued the District-based company, which operates SB Nation, the Verge and Vox.com, among other Web properties, at roughly $380 million.

At first blush, Vox Media seems like the kind of company that should be located in a city like New York or San Francisco. But Washington has long been home to a constellation of media companies.

Aside from The Washington Post, of course, Gannett, Albritton Communications, National Geographic and Discovery Communications employ thousands of people locally. Indeed, Vox Media chief executive Jim Bankoff served as executive vice president of programming and products at AOL back when the Internet pioneer was headquartered in Dulles.

And media is just one of Washington’s industries whose economic impact often stands in the shadows of the federal government. Hospitality — think Marriott International, Hilton Worldwide and Host Hotels and Resorts — is another example.

In November, Sweetgreen pulled in $18.5 million from investors as the salad chain expands to the West Coast. There aren’t many national restaurant chains based in the Washington region, but Sweetgreen was founded by three Georgetown University graduates who opened the first location close to campus.

“Washington has always attracted the 25- to 35-year-old group as an interesting place where people come here and become seasoned. That used to be the pattern. Today, there is just a lot of young people here, and a lot of them have decided they can do it better themselves,” Fuller said.

That means they’re creating their own companies that could attract the next wave of investments — and ultimately become the region’s big players. And the number of fledgling start-ups in the region is only poised to grow as area universities pour more resources into fostering young entrepreneurs and more incubator spaces, such as 1776, Disruption Corp. and Refraction, open their doors.

“We’re seeing a lot of high-quality companies out there that are raising money and the fact that they’re in different industries is a good leading indicator for the region,” Backus said.